I don't know very well how servers work. But I think there is specific servers ONLY for instances (due this games has cross-server for duties), so, the character "teleportS" to that server to run the isntance wit other player that also has been teleported. So, the instances server crased with people entering them (or already in), so, the game client when you try to log in will charge the last location, which is the instance, who no exist now because the instance servers are down. And that causes de infinite load screen, the game don't get response for the instace server which your character is in.

I think this is the problem right now (of course, I'm supposing it).